Capitalism Offers the Gift of Flight

Capitalism brings out the best in people. It is often portrayed as an amoral battlefield for the conflict of interests between the poor and the rich. Unethically unrestrained, for the haves to do as they wish to the have-nots. However, this economic, social, and political system is thoroughly structured with ethical norms and inherent laws. Theft, which is ironically pinned as capitalism’s cardinal sin, is rejected entirely. In fact, it is based upon the principle of earning the rewards of value creation and innovation. This principle leads to further ethical implications that undoubtedly furthers the virtues of the human species and advances society.

The actuality that capitalism has advanced the quality of life and material well-being of societies across the globe can hardly be disputed. This essay, however, will not focus on this impressive aspect of the system, but on the ethical virtues of capitalism. To illustrate these virtues, a discussion on voluntary cooperation, human action, and a moral argument of capitalism, will be used. All economic, social, and political systems have their iniquities. However, I will argue that capitalism’s virtues do not only outweigh these iniquities, but if left unrestrained, can eliminate these problems.

Voluntary Cooperation

Oscar Wilde, in his 1891 essay “The Soul of a Man under Socialism” promotes his desire of collectivism by suggesting that by converting private property into public wealth, substituting cooperation for competition, society will be restored to its proper condition of a thoroughly healthy organism, and insure the material well-being of each member of the community. He does add a caveat that claims this can only be possible as long as individualism is at its focus. He also acknowledges that if the socialism is authoritarian, and armed with economic and/or political power, the state of man will be worse than how it is under capitalism. [1]

My question is when, in history, has the state not been armed? The state has always coerced its people through economic, political, or military armament. It is the only way the state can exist! Murray Rothbard explains that “groups of men calling themselves “the government”…have attempted—usually successfully—to gain a compulsory monopoly of the commanding heights of the economy and society.” To further illustrate, “…the crucial monopoly is the State’s control of the use of violence: of the police and armed services, and of the courts—the locus of ultimate decision-making power in disputes over crimes and contracts.” This coercion, that is hardly ethical in theory or in practice, is the means in which collectivism run by a state can sustain itself. [2]

Wilde writes this in a time where the industrial revolution was in full swing and the transition of farm life toward a life of mass production and machinery was filled with a perception of serfdom to the owners of capital. However, this mass urbanization was not brought upon the people through coercion, but voluntarily. It was through individual choice that laborers would subject themselves to these working conditions. The benefits of earning the fruits of your labor outweighed the costs a life of stagnation and poverty that existed before. It was also a time that, as Ayn Rand points out, that the concept of man as an individual, independent and free, was foreign to the roots of Europe. Capitalism, during this time, is what ended serfdom in the political arena, but ironically, was reluctant to leave the minds of the intellectuals. [7]

Capitalism is what brought forth the true implementation of voluntary cooperation. Where individuals now had the opportunity to choose how to make use of his or her resources, i.e. mind and labor, and the rewards. It is not merely an economic system that efficiently allocates resources to the highest bidder, but a social system that recognizes and respects individualism. Compared to any other system, in practice, this system banishes the use of physical force from human relationships as a means to cooperate.

All human relationships are voluntary in a capitalist system. It allows individuals to choose whether or not they would like to cooperate with others. This beautiful component of the market is not what is ethical. It is that ethical norms can be conveyed through voluntary interaction. The right to agree or disagree with a person is what is ethical. Although there are ethical norms, ethics vary from person to person. Through voluntary association, unethical practices are diminished due to discretionary noncooperation.

Using another facet of Wilde’s contemplations, he rightfully claims that disobedience is what has advanced society. [2] Yet, this idea becomes juxtaposed with a collectivist society in which property is publicly owned because it punishes any minority that does not agree with the majority. As said before, a socialist system requires a ruling authority that controls not only the means and distribution of production, but the ethics and desires of its people. Although we may sometimes see capitalist systems with little political freedom, we can never see a socialist system with true political freedom. Every action would require approval of the majority, or of the state. What ruling authority would allow any media time to criticize the government? Is this ethical? The answer to that question is a resounding no. The freedom to disagree with the government or any individual can only be permitted in a society where voluntary cooperation is present.

The first line of Mill’s “Of Individuality” says, “If all mankind minus one, were of one opinion, and only one person were of the contrary opinion, mankind would be no more justified in silencing that one person, than he, if he had the power, would be justified in silencing mankind.” In a collectivist society, the Individual disappears, and dissenting opinions must be silenced. This silencing of the individual, or minority, is in essence, blatant theft of not only the individual’s opinion, but of society and its posterity.

In any social system, there is a foundation of some variety of a theory of ethics. The “common good,” has many times been used as the moral justification for the social system. However, more often than not, this justification has created tyrannies that enslave dissident minorities, or individuals, to what the authorities claim is “the common good.” Ayn Rand describes three types of ways to describe what is good. There is the subjective, intrinsic, and the objective theory of moral values. The intrinsic theory claims that things or actions are inherently good (or evil), and pays no value to the subjectivity or relativity of those transacting with the things or actions. The subjectivist theory claims that thing or action’s value is determined by man’s consciousness, created by, “his feelings, desires, and intuitions,” independent of reality. The objective theory depends on the evaluation of the facts through man’s reasoning processes, and that the value of the good is “an aspect of reality in relation to man,” which is discovered, not invented, by man. In essence, the foundational inquiry behind the objective theory is, “Of value to whom and for what?” [7]

The objectivist theory of value is the only theory that cannot work through force and coercion. The subjectivist and intrinsic theories may have some voluntarism within, but tyrannical groups use both, as they pay no attention to the relation of the good or service to each individual. Through these theories of value, those in power must force-feed individuals their own subjective or intrinsic beliefs of value for there to be a common understanding amongst the ruled. However, with the objectivist lens, it is through voluntary cooperation that value is determined. Capitalism is the only realistic system that offers that option and deems it unquestionably ethically superior. In order for a product or action to be deemed “good”, it is through noncompulsory reasoning of the individual, which adheres to the inherent right of the individual and power of the mind.

Human Action

Summarizing from Mises’s analysis of, “Human Action,” there are three conditions that make people act. The first condition is that a person is content and satisfied. At this state, he does not and will not do anything as he is content in his is state. The second condition is where the person feels a sense of unease and discomfort. This is the state we commonly recognize as humans, which always leads to us wanting to go from discomfort to comfort. However, there is a third condition that is required in any human action, which is that there is some “purposeful behavior” that can alleviate the person from the sense of uneasiness that will lead to a state of contentment, which leads us back to the first condition. This three-step process goes into every move a person makes. From getting out of bed, to writing a novel, to purchasing a bicycle, to running for president—no matter how miniscule or grand the action is, all human action requires touching on all three of these conditions. [3]

Capitalism is the only system that does not distort the natural processes of human action. It allows people to be people, to seek happiness, absent of coercion. The relevance of this simple explanation of human action is to demonstrate that when human action is left unabated, and allowed to go through its natural processes within the natural objectivist’s lens, we see society progress faster than if we were to control the actions of humans.

Because of Eve’s decision to take a bite of the apple from the tree of knowledge, humans have persistently pursued knowledge. In this pursuit, which has left humans in this constant state of unease, knowledge has been obtained, translated into physical form, traded, judged, and chosen, be it either material goods or ideas. To boot, these goods and ideas have spilled over and have elevated the human species, along with the entire world, to great heights. Capitalism is the only system that leaves the processes of human action unfettered and has allowed the creation of philosophical literature, corn, planes, shoes—virtually anything we can imagine along with what there is to come! There is no question that these products have benefitted the world, but the question is has it made us better people?

It has. The moral meaning behind the economic law of supply and demand says that the value of someone’s work or product is determined by the voluntary approval of those willing to reciprocate the trade with their work or product. This means that due to the voluntary nature of the free market, consumers and producers, all performing within their natural processes of human action, require the best from each other. Producers want the best consumers. Employers want the best employees. Employees want the best employers, and so on. This is what makes capitalism ethically superior to any other system that attaches itself to a collective or an altruistic premise. It requires individuals to support their own life, in which they do not expect others to support them and vice versa.

To expand on the spillover effect that benefits all levels of ability and intellect, those at the top that create these products only get a fraction of what is deserving for the efforts, no matter how large the profits and fortunes. Meaning, the exchange of ideas and knowledge that comes from a capitalist system, is shared with everyone for the rest of generations— compared to the retail store cashier, who gets paid much more in proportion to the effort given and value created for the world. [7]

Many may deem this unethical and exploitative, but it is quite the contrary. The products created by those at the top of the ability spectrum benefit everyone below them in a much higher proportion because of the unlimited value that knowledge and ideas bring to the world. To quote Adam Smith, the father of economics, “It is not very unreasonable that the rich should contribute to the public expense, not only in proportion to their revenue, but something more than in that proportion.” When Smith says “should” he doesn’t mean through coercion, but as a matter-of-fact that they indeed do contribute greatly to society just by the value they have created through the natural process of human action. Ayn Rand would call “the men of the mind” the most important contributors the world that can only exist through capitalism.[6]

Capitalism is Truly Moral Making The Best People

Capitalism is a system in which the individual’s rights to life, liberty, and property are under legal protection. This is what legal philosopher Lon Fuller claims allows for the morality of aspiration to flourish. When a society is based off the morality of aspiration, the best in people come out. Fuller explains that this class of morality is depicted by the ancient Greek philosophy of excellence, challenging ideals, and exists at the highest ranks of human achievement. Interestingly, the word “virtue” comes from the vocabulary of the morality of aspiration.

The capitalist system is the most just system as it provides the institutions for self-directedness and purposefulness. When these rights are protected, free will becomes key. The only way someone can be ethical or morally virtuous is if he voluntarily, and freely, chooses to be. Having the ability to choose, is what is virtuous.

No societal system can make people bad or good, however, but in order for there to be truly good people, freedom must reign. Similar to the analogy that in order for there to be light, there must be dark, the option to be immoral must be present for one to do determine whether the person is being ethical or morally virtuous. Capitalism is the system that allows this to take place. Of course, there are members of the society that choose ethically questionable or immoral actions, but that exists in any societal system. When one chooses to be morally virtuous in a capitalist system, one knows that it is the truest version of virtue that can exist.

My Grandparents

To conclude my arguments for why I think capitalism brings out the best in people, I would like to speak on behalf of my grandparents. Growing up, I was introduced to the horrors of a command and control economy from the stories my mother would share with me about my grandfather being imprisoned as a political prisoner in Cuba for sixteen years. My other grandfather was also imprisoned for six years as a political prisoner. Why?

As a youngster I would question, “Well did they do something bad?” “Were they immoral?” My mother would answer; “They stood up for what they believed to be right.” This does not answer the ethical question of whether their actions were morally or ethically questionable. It is true that both those for the revolution and those opposed had strong dispositions toward their respective ideologies, however it was straightforward which side was the aggressor. When and individual, group, or government must force their subjective morality upon others in order to reach consensus, rights are infringed upon, and what is left is an injustice.

My family was able to move to the United States in 1980. By 1987, they would get to experience one of the greatest economic growth periods for a nation at peace, where freedom to pursue your own happiness and prosperity was at the forefront. Since then my family has been able to enjoy not only the material prosperity that capitalism in the United States has been able to offer, but has made them the best they can be. This system has pushed my family in ways that has unquestionably lifted them to the highest ranks of human achievement. This does not mean they are wealthy by any means, though it has allowed them to pursue their interests and goals in a peaceful, virtuous manner.

What good is it to grow your wings if you are not able to fly? Capitalism offers the gift of flight.

References

Wilde, Oscar, The Soul of a Man Under Socialism

Rothbard, Murray, The Ethics of Liberty

Mises, Ludwig von, Human Action

Palmer, Tom, The Morality of Capitalism

Younkins, Edward, Capitalism, The Only Moral Social System

Rand, Ayn, Atlas Shrugged

Rand, Ayn, Capitalism: The Unknown Ideal

Mill, John Stuart, Of Individuality

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Published by Kevin D. Gomez

Kevin D. Gomez is an Instructor of Economics at Creighton University and Program Manager at the Institute for Economic Inquiry. He received his B.S. in Economics and Statistics from Florida State University and his M.A. from George Mason University. Trying to pay it forward by helping noneconomists make sense of the crazy world.
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